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FOREX: Antipodeans Outperform On Chinese Stimulus, CHF Lags

FOREX
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The Chinese equity rally & property market stimulus cap any rallies in the USD after a pullback from session highs in both U.S. & European equity index futures allowed the broader USD to stabilise.

  • AUD & NZD benefitted from Chinese developments, with iron ore rallying over 10% and the CSI 300 adding over 7% ahead of the week-long Chinese holiday.
  • Mixed Chinese PMIs didn’t impact.
  • AUD/USD managed a marginal extension beyond Friday’s high, topping out at 0.6941. Next resistance comes in at the 2.0% 10-DMA envelope.
  • The move away from session highs in western equity index futures, post-LDP leadership election pressure for Japanese equities and heightened geopolitical risk provided support for the Japanese currency.
  • USD/JPY traded as low as 141.65 before bouncing to 142.00. Technicals remain bearish. Next major support in the pair comes in at the Sep 16 low/bear trigger (139.58).
  • CHF lags all G10 peers.
  • German, Italian, Portuguese & Irish CPI data is scheduled today.
  • Multiple sell-side names now call for an October ECB cut following last week’s soft French & Spanish inflation readings.
  • ~20bp of easing is priced in for the October meeting.
  • MNI Chicago PMI is also due today.
  • Central bank speak will come from Fed’s Powell & Bowman, ECB’s Lagarde & BoE’s Greene.
  • This week’s major U.S. data release comes in the form of Friday’s NFP data.
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The Chinese equity rally & property market stimulus cap any rallies in the USD after a pullback from session highs in both U.S. & European equity index futures allowed the broader USD to stabilise.

  • AUD & NZD benefitted from Chinese developments, with iron ore rallying over 10% and the CSI 300 adding over 7% ahead of the week-long Chinese holiday.
  • Mixed Chinese PMIs didn’t impact.
  • AUD/USD managed a marginal extension beyond Friday’s high, topping out at 0.6941. Next resistance comes in at the 2.0% 10-DMA envelope.
  • The move away from session highs in western equity index futures, post-LDP leadership election pressure for Japanese equities and heightened geopolitical risk provided support for the Japanese currency.
  • USD/JPY traded as low as 141.65 before bouncing to 142.00. Technicals remain bearish. Next major support in the pair comes in at the Sep 16 low/bear trigger (139.58).
  • CHF lags all G10 peers.
  • German, Italian, Portuguese & Irish CPI data is scheduled today.
  • Multiple sell-side names now call for an October ECB cut following last week’s soft French & Spanish inflation readings.
  • ~20bp of easing is priced in for the October meeting.
  • MNI Chicago PMI is also due today.
  • Central bank speak will come from Fed’s Powell & Bowman, ECB’s Lagarde & BoE’s Greene.
  • This week’s major U.S. data release comes in the form of Friday’s NFP data.